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Goldman to face lawsuit over mortgage bonds

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Mortgage Professional America | 31 Mar 2014, 10:29 AM Agree 0
A judge has refused Goldman Sachs' request to dismiss a lawsuit alleging that it misrepresented the underwriting standards of millions of dollars in mortgage-backed securities
  • Wm Matz | | 31 Mar 2014, 01:41 PM Agree 0
    Let's hope that these investor lawsuits finally bring some accountability to the perpetrators of this massive mortgage fraud. By relying on AAA ratings that were based on illusory insurance that dwarfed the assets of insurers such as AIG, Goldman and other deliberately created a false sense of the safety of these RMBS. Without that purported level of safety pension funds would have been prohibited from investing.

    The vast expansion of investment funds due to the false safety ratings fueled an almost insatiable demand for mortgages to fill the RMBS. That, in turn, led to virtual abandonment of the underwriting standards, as the judge rightly notes, for which Goldman should be held accountable.
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